Having lived and worked in Australia for the past 20 years, Vanessa believes that despite growing up in China, she has adopted a "Western approach" to communicating. This means she gets to the point quickly, asks direct and probing questions, moves the conversation quickly to the business objectives, and doesn't waste time on frivolous conversations.

In the last 5 years she has spent more time working in China and now adopts a more "Chinese" approach to relationship building. This involves long conversations about "non-business" issues, including the weather, the food, families (particularly the hopes and dreams for their children) and the differences between China and other countries. Often business is not discussed at all, or at the very end of a dinner, after all other conversations are exhausted.It's important to remember that as a foreigner (whether you have a Chinese or western face) you are building familiarity, confidence and more importantly, trust with your Chinese counterparts. This takes time and patience. Build relationships first and the business will follow.

2. Respect Hierarchy

Unlike our egalitarian society, where everyone is treated equally and our organisation structures are “flat”, Chinese people are totally comfortable with a "hierarchical culture". Decisions are made by leaders at the top (whether Government, Business or Family leaders) and are then implemented by senior, middle and junior managers depending on their level of seniority. It's important that you understand this and also respect and recognise everyone's role in the process; particularly the juniors who often get forgotten and are rarely praised for their contribution to a successful outcome. Vanessa always makes a point of singling out the important role played by the implementation team on her visits to China.

It's also important for Australian organisations to mirror the Chinese hierarchy by lining up the same way. That is. Chairman to Chairman, CEO to CEO and deputies and middle managers with their counterparts. This is critical to getting a deal done because whilst the seniors will make high level decisions, they will only happen if the juniors do the implementation work.

It also requires smaller companies to be creative about how they line up in China, for example, engaging a Non Executive Chairman to be present when the Chinese Chairman is in the room; and to ensure your lower level staff are available to work with the implementation team and to answer their detailed questions.They see their role as protecting their bosses from making decisions without all the facts, so you need to be fully prepared for exhaustive questioning.

3. Be willing to put on a Show

The Chinese are often impressed by the size of your office, the view out of your window, the strength of your team and your brand of car. Don't hide your success from them (as you are likely to do amongst your fellow Australians) but be willing to flaunt it! The Chinese want to deal with successful and influential people, so be a lot more willing to play up your connections and success rather than be humble.

Of course, you mustn't tell lies or fake your success as this will likely backfire on you. But play to your strengths and Australia's strengths. The Chinese are envious of our lifestyle in Australia, our clean and safe environment and our friendly and open culture. Invite them to come here, show them what we have and repay their hospitality in your home town. Take photographs and share them on WeChat to give ‘face’ and you'll be surprised at how quickly this leads to a successful business outcome!

To attend the next ACSME Roundtable on Tuesday 27th February discussing "Recruitment and Human Resource Management in China", please click here

Walking around Sydney’s CBD, it is hard not to notice the ever-growing Chinese population. Whether they are students, tourists or migrants, the numbers of Chinese arrivals in Australia have been growing exponentially over the past decade. Whilst there has been some progress and focus on opening up China to Australian exporters through the various tariff reductions introduced by the China-Australia Free Trade Agreement, China’s inbound activity into Australia is expected to provide even more opportunities in the short-term for Australian businesses of all sizes. However, we believe there is still a long way to go for Australian businesses to fully realise this opportunity.

The numbers

At the end of 2014, there were 859,500 visitors to Australia from China, but in just 5 months, this number shot up to 921,800 visitors. Three years ago, it was predicted that there would be 1 million Chinese visitors to Australia by 2020, however, with the current trajectory; we may actually reach that number by the end of 2016! Chinese tourists are also spending more than before. By May 2015, Chinese tourists generated A$6.4 billion in revenue, up from A$5.7 billion at the end of 2014.

The Chinese community in Australia has also experienced similar growth. The number of Chinese-born Australians has doubled over the past 10 years to reach 450,000 and is still growing. And last year, our Australian universities recorded over 150,000 enrolled Chinese international students.

The opportunities

With this kind of growth, Australian businesses are in a unique position to engage in the ‘China opportunity’ without actually leaving Australia. As an example, luxury hotels, retailers and high-end food and beverage providers can expect a boom in business since Australia overtook France as the number 1 international luxury destination for Chinese tourists at the end of 2014. The Chinese community also provide an effective testing ground for Australian products before exporting to China. And businesses may not need actually need to export their products as tourists and international students are sending more and more Australian products back home to friends and family. As you may have read in the news, many local Chinese people are purchasing infant formula from Australian supermarkets and bringing it into China with them to give to their family and friends. In the services space, small and micro businesses can develop tailor-made services targeting the wealthy Chinese in Australia. I recently met with the owner of a small family-run beautician in Sydney which was providing specific skin treatments to the wealthy Chinese living in the local area. Similarly, I also came across a small restaurant in Sydney which had developed a website hosted in China to advertise their business after they saw a rise in Chinese customers.

There is still some way to go…

Despite the opportunities in exporting and selling Australian products and services, the local Chinese community are not fully engaged by Australian businesses. In 2014 the Diversity Council of Australia released a report in which found that whilst the Australian labour force is 9.3% Asian born, only 4.9% make it to senior executive level. In ASX 200 companies, only 1.9% of executives have Asian heritage. These percentages would be even smaller if we just looked at those with Chinese heritage. Australian companies are also very reluctant to hire Chinese international students as interns and to recruit and sponsor them after graduating.

We predict that the Chinese community in Australia will eventually become the bridge for Australian businesses wanting to engage fully with the Chinese market. However, businesses need to realise that China’s inbound activities in Australia do not only present an opportunity for selling and exporting products and services. By hiring a Chinese intern or full-time employee, the worst thing that can happen is that you will have a hard-working, diligent and talented person working for you in your office. The best thing that can happen, however, is that they could use their connections through family, friends and colleagues to open the door to invaluable business opportunities with China.

With the well-publicised growth of Chinese investment into Australian commercial and residential real estate; and the surge in property prices, many have been asking if Australian property is becoming ‘overbought’.

Despite an easing in the overall amount of Chinese investment into Australia in 2014, for the first time, investment into commercial real estate and infrastructure accounted for over half of the total transactions and was dominated by investments made by high net worth individuals and private enterprises. Also in 2015, Melbourne and Sydney overtook London as the second most popular destination for Chinese investment (Manhattan in New York is currently number one). With numbers like this, it is easy to understand why so many are concerned about the sustainability of Chinese investment into Australia and are worried that it may grind to a halt. However, I believe that the wave of Chinese investment is only just beginning and we still have a long way before Australia could be regarded as ‘overbought’.

Over the past decade, China has accumulated large reserves of foreign capital due to the disparity between its outbound FDI and inbound FDI. However, since 2008, outbound FDI has started to increase dramatically and in 2014, it was almost equal to inbound FDI for the first time. And it is expected to grow even more – by approximately 10% year on year according to the Chinese Ministry of Commerce (MOFCOM). This is driven not only by the Government’s ‘Going Out’ Strategy and the new ‘One Belt, One Road’ Initiative (China’s new foreign policy encouraging infrastructure investments and developments across Asia and Europe), but also by encouraging private individuals and enterprises to invest overseas through a number of well publicised initiatives, including the Qualified Domestic Individual Investor (QDII) scheme, the internationalisation of the RMB and the push for greater diversification of assets overseas. With such a large wave of outbound foreign capital and a national priority to invest overseas, this indicates to me that the wave of investment from China has only just begun, and is likely to continue well into the future.

2014 was a significant year for Chinese investment into Australia. Even though overall investment decreased slightly from 2013, it was the first year that Chinese private sector investment exceeded state-owned enterprise investment. And also the first time that investment was diversified away from the mining and resources sector into new sectors, such as commercial real estate, infrastructure projects and the tourism and leisure industry. Also, Australia represented around 6% of China’s outbound FDI in 2014 indicating that there is still plenty more room for this number to grow. As China increases its outbound FDI by 10% each year, and with the growing interest in overseas property and infrastructure, we can expect to see new Chinese private enterprises, individuals and property development companies entering the Australian property market.

Chinese investment into global commercial real estate

Chinese investment into Australian commercial real estate

According to Knight Frank, for the first time ever in 2015, Chinese outbound investment into global commercial real estate reached USD$30 billion, double that of 2014. But what was particularly notable was that Australia received nearly 15 percent of this amount. I believe this is extremely significant because it demonstrates China’s commitment and interest in Australia’s property market. From travelling around China, particularly to the second and third tier cities, and my discussions with lesser-known but comparatively large property development groups, many are developing their own ‘Going Out’ Strategies and are drawn to Australia because of the well-established bilateral relationship, our well-regulated and relatively stable market government and our ‘clean, green and safe’ credentials.

Source: Knight Frank Research

So who can we expect to invest into Australian property? Besides wealthy Chinese individuals and private companies investing into off-the-plan properties or new property developments, research from Knight Frank indicates that Chinese insurance companies are also expected to participate in the next wave of investment. Currently, only Sunshine Insurance has invested in Australia (they purchased Sydney’s Sheraton on the Park Hotel and ‘The Vintage’ resort in the Hunter Valley) but the table above indicates that more than half of the major insurance companies have expressed interest to invest offshore. Of course there is no certainty that they will invest in Australia but the growing trend is evident. Taking into account the growth trajectories, the bilateral relationship and Chinese Government policies working in our favour, it is reasonable to assume that these companies may begin to start making significant investments across Australia, only adding to the ‘demand side’ of the equation.

Interestingly, it is not only ultra-rich Chinese individuals who are investing in Australian luxury properties; ultra-rich Indians are also becoming increasingly interested in the market. According to Agent Ken Jacobs, the head of Christie’s International Real Estate in Sydney, more ultra-rich Indians are embarking on ‘due diligence’ checks. Whilst these have not yet translated into sales, he expects this to happen in the next few years. In addition, ultra-wealthy investors from other Asian countries, such as Singapore, Malaysia and Indonesia, are also expected to follow Chinese investors and become much more active in the Australian property market (residential and commercial).

To answer the question, no, I don’t believe Australia is overbought. There is every indication that Chinese investment into Australian property will continue to grow and we can also expect new players to emerge from other parts of Asia, including India, Malaysia, Singapore and Indonesia. The bigger question is whether Australia will be able to meet this demand. With Sydney and Melbourne’s CBDs becoming increasingly overcrowded; Governments, town planners, businesses and entrepreneurs have a once in a generation opportunity to capitalise on future inbound investment to design and build new residential, commercial and infrastructure projects to contribute to the growth of the outer suburban and even regional areas across Australia. This process of “nation building”, which is now so prevalent in other Asian countries, could be transformational for Australia as we grapple with the challenges and opportunities of living in the Asian Century.